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What do I put in my business plan?

So what does a business plan look like, and why is it important? Every plan should have a solid structure. There are a number of elements to a business plan that you must cover.

Cover and confidentiality clause

Ensure the cover of your plan carries your branding and maybe even a photograph of your product.

It is always good practice to include a confidentiality clause. You should ask the recipient to sign this, as you need to ensure that sensitive information included in the business plan is treated confidentially.

Executive summary

This is a brief summary of your business plan, explaining all the relevant sections succinctly. You will only know the content of your executive summary after you have considered all elements of your business’s operations, so complete this section last.

An executive summary is important because it gives banks and prospective investors a quick insight into what your business is all about, and gives them the impetus to consider your business plan in more depth.

Many business owners miss out on investment because the executive summary doesn’t grab people’s attention. Failing to take the time to write a snappy and informative executive summary could cost you in the long run.

Company description

There are a number of factors to include in this section of your business plan, including:

Shareholder and promoter information

Adviser information

Legal status of the business

Main products and/or services

Long-term aim

Goals

Your company description is important because it will show you have a clear understanding of what it is you’re trying to sell, the supports you’ve identified to help, and your interpretation of how the business will perform.

Your long-term aim will be your overall target, and your goals will pinpoint how you will get there. As with all sections of the plan, ensure your language is clear and easy to follow.

Market analysis

Here, you will complete different analyses, such as the PESTLE analysis and the SWOT analysis. These cover political, economic, social, technological, legal and environmental factors; and the business’s strengths, weaknesses, opportunities and threats, respectively.

Marketing and sales

This section covers areas, such as:

Customer trends and opportunities

Marketing and sales strategy

Pricing

Customer service

This is important, because it gives you the chance to delve deeper into who it is you’ll actually be selling to, how exactly you’ll do it, and how you’ll create awareness for your product or service. There is no room for waffle here, as experienced professionals will spot it a mile away. Be clear and concise, and do not include any unrealistic projections.

People

This identifies the key players in your business, along with a hierarchical structure, if applicable. Identify the main senior members of the business here, and use the chart provided to establish the people that report to those senior staff members, if it is relevant.

Remember to identify any mentors that have helped you, and give some context to explain their involvement, such as their link to your sector and their experience. Including this section will show that you have others involved, preferably those with complementary skills to yours.

Early-stage investors are looking for businesses where the founders have a strong track record and “domain knowledge” in the market segment they are addressing. For example, a founder with experience in a specific area of enterprise software is likely to have an edge on an individual who might have technical skills but doesn’t know about that niche.

Investors also like to see teams where there is a good combination of skills or where there are gaps through which external advisers or mentors can help.

R&D and business assets

Include any R&D funding and detailed information on business assets here. This will show the interest your business has already generated, along with its value.

If you are a start-up and your business plan is about trying to secure investment, you need to describe how your product or service is different and how it will enable you to complete. Investors will be looking at whether your product or service is indeed innovative and whether it is “defensible” against others in the marketplace.

In reality, it is unrealistic to expect that any new product or service will be the first to market, but that doesn’t mean it can’t be innovative. What investors are looking for is whether you have a fair chance to compete.

Financial forecasting

A critical part of your plan, this section includes details of your loans, security and guarantees, internally generated capital and other funding. You should include both historic and projected cashflow statements, balance sheets and profit and loss accounts.

Include the financial assumptions on which your plan is based, including the cost of sales, overheads and investment, and include a sensitivity analysis to track any changes to these projections. See the ThinkBusiness.ie sensitivity analysis template to help you. Any funding requirements should also be included.

Financial projections are a crucial part of your plan. Investors and banks will scrutinise these figures and make a judgment call on whether they are credible or not, so you will need to be able to justify the assumptions you make.

If you are seeking equity or bank finance, you might consider including a roadmap on how you plan to meet your commercial goals, showing the investment you will need. Your roadmap should have milestones that are clear, achievable and measureable.

3 Action Points

1

Prepare your plan carefully. Do your research and write the plan well. Make sure it presents your business in the best light.

2

Seek advice. If you have any reservations, seek advice from a professional who can help. Your Local Enterprise Office or Enterprise Ireland could also be in a position to offer guidance.